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Taxman increases number of raids on premises by over a quarter

Hayley Kirton
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The taxman is using raids as a valuable tool to secure convictions (Source: Getty)

More and more businesses could be expecting a rather abrupt visit from the taxman, as figures out today has found the number of raids carried out by HM Revenue & Customs (HMRC) has shot up over the last year.

The research found that HMRC searched 761 properties as part of its criminal investigations over the course of the year to March, an increase of 28 per cent compared with 593 raids the year before and an increase of 53 per cent compared with 499 property searches five years ago.

Law firm Pinsent Masons, which carried out the research, predicts the number of raids will continue to grow, as the taxman increasingly hones in on aggressive tax avoidance in an effort to secure more convictions.

Read more: HMRC rakes in £3bn by getting people to cough up early

"Tax evasion investigations can be complex and time-consuming to uncover what are often well-hidden tracks," said Paul Noble, tax director at Pinsent Masons. "Often the only way to do this is by getting access to personal documents, files or correspondence through searches of a suspect’s homes or business premises.

"HMRC is taking greater advantage of these powers as a shock and awe tactic. By raiding premises, it not only hopes to be able to seize the proof it needs to build its case, it’s also a clear show of strength and intent which should act as a deterrent to others.

"As the distinction between aggressive tax avoidance and tax evasion becomes increasingly blurred in HMRC's eyes, it's likely to rely increasingly heavily on evidence gathered from premises searches."

Read more: HMRC proposes new ways to crack down on offshore tax evasion

How many raids HMRC has carried out HMRC may well have more ammunition added to its arsenal in the not too distant future. In August, the Treasury proposed a new offence which would penalise advisers who provide their clients with information on how to avoid tax.

Read more: Taxman scraps quarterly updates for 1.3m small businesses

Meanwhile, the taxman also announced the launch of its Worldwide Disclosure Facility earlier this month, which offers those with outstanding tax liabilities from offshore wealth one last chance to come forward and disclose this to HMRC before tougher penalties come into force.

A HMRC spokesperson said: "We have a range of criminal and civil powers we use to tackle tax fraud of all types and do not hesitate to do so where necessary and proportionate."

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